BILL NUMBER: SB 475	CHAPTERED  10/10/99

	CHAPTER   669
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 6, 1999
	PASSED THE SENATE   SEPTEMBER 10, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 8, 1999
	AMENDED IN ASSEMBLY   SEPTEMBER 3, 1999
	AMENDED IN ASSEMBLY   JULY 8, 1999
	AMENDED IN ASSEMBLY   JULY 7, 1999
	AMENDED IN SENATE   APRIL 28, 1999

INTRODUCED BY   Senator Dunn

                        FEBRUARY 17, 1999

   An act to amend Section 10324.95 of, and to add Section 10234.6
to, the Insurance Code, relating to long-term care insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 475, Dunn.  Long-term care insurance:  rate guide:  data
collection.
   Existing law requires every policy or certificate for long-term
care insurance to include a provision for retaining the policy or
certificate after the first year and permitting changes in coverage
that would either lower or increase premiums.  Existing law requires
an issuer of long-term care insurance, or where an agent is involved,
the agent, to present an applicant with a long-term care insurance
personal worksheet.
   This bill would require the Insurance Commissioner to annually
prepare a consumer rate guide for consumers for long-term care
insurance, as specified.  The bill would specify the dates and
methods for distributing the consumer rate guide.  The bill would
require each insurer to provide, and the Department of Insurance to
collect, specified data on long-term care policies and certificates,
including all policies, whether issued by the insurer or purchased or
acquired from another insurer, in the United States, on or after
January 1, 1990.  The bill would provide that the data collected are
public records open to members of the public for inspection, unless
they are a trade secret as defined.  The bill would require insurers
to include in the premium section of long-term care insurance
personal worksheets information, as specified, on any increases or
requests for increases in rates of prior policies sold in any state
by the insurer.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 10234.6 is added to the Insurance Code, to
read:
   10234.6.  (a) The commissioner, in consultation with
representatives of the Health Insurance Counseling and Advocacy
Program, shall annually prepare a consumer rate guide for long-term
care insurance that shall include, but not be limited to, the
following information:
   (1) An explanation of the different kinds of long-term care
insurance and coverages available to consumers.
   (2) The premium history of each insurer that writes long-term care
policies for all the kinds of long-term care insurance and coverages
sold by the insurer.
   (b) The consumer rate guide shall be published no later than
December 1st of each year commencing with the year 2000, and shall be
distributed using all of the following methods:
   (1) Through Health Insurance Counseling and Advocacy Program
(HICAP) offices.
   (2) By telephone using the department's consumer toll-free
telephone number.
   (3) On the department's internet web site.
   (c) In addition to the distribution methods described in
subdivision (b), each insurer that markets long-term care policies in
this state shall include in the premium section of the "Long-Term
Care Insurance Personal Worksheet" required by Section 10234.95, a
statement that reads as follows: "A rate guide is available that
compares the policies sold by different insurers, the benefits
provided in those policies, sample premiums, and the history of rate
increases, if any, for those policies.  You can obtain a copy of this
rate guide by calling the Department of Insurance's consumer
toll-free number (1-800-927-HELP), by calling the Health Insurance
Counseling and Advocacy Program (HICAP) toll-free number
(1-800-434-0222), or by accessing the Department of Insurance's
Internet web site (www.insurance.ca.gov)."
   (d) For purposes of this section, the department shall collect,
and each insurer shall provide to the department, all of the
following information for each long-term care policy and certificate,
including all policies, whether issued by the insurer or purchased
or acquired from another insurer, issued in the United States on or
after January 1, 1990:
   (1) Company name.
   (2) Policy type.
   (3) Policy benefits.
   (4) Policy form identification.
   (5) Dates sold.
   (6) Premium rate increases requested.
   (7) Premium rate increases approved.
   (8) Dates of rate increase approvals.
   (9) Sample premiums for different age groups.
   (10) Any other information requested by the department.
   (e) Insurers shall provide the information required pursuant to
subdivision (d) no later than July 31 of each year commencing with
the year 2000.
   (f) Notwithstanding any other provision of law, the data submitted
by insurers to the department pursuant to this section are public
records, and shall be open to inspection by members of the public
pursuant to the procedures of the California Public Records Act.
However, a trade secret, as defined in subdivision (d) of Section
3426.1 of the Civil Code, is not subject to this subdivision.
  SEC. 2.  Section 10234.95 of the Insurance Code is amended to read:

   10234.95.  (a) Every insurer or other entity marketing long-term
care insurance shall:
   (1) Develop and use suitability standards to determine whether the
purchase or replacement of long-term care insurance is appropriate
for the needs of the applicant.
   (2) Train its agents in the use of its suitability standards.
   (3) Maintain a copy of its suitability standards and make them
available for inspection upon request by the commissioner.
   (b) The agent and insurer shall develop procedures that take into
consideration, when determining whether the applicant meets the
standards developed by the insurer, the following:
   (1) The ability to pay for the proposed coverage and other
pertinent financial information related to the purchase of the
coverage.
   (2) The applicant's goals or needs with respect to long-term care
and the advantages and disadvantages of insurance to meet these goals
or needs.
   (3) The value, benefits, and costs of the applicant's existing
insurance, if any, when compared to the values, benefits, and costs
of the recommended purchase or replacement.
   (c) The issuer, and where an agent is involved, the agent, shall
make reasonable efforts to obtain the information set out in
subdivision (b).  The efforts shall include presentation to the
applicant, at or prior to application, of the "Long-Term Care
Insurance Personal Worksheet," contained in the Long-Term Care
Insurance Model Regulations of the National Association of Insurance
Commissioners.  The personal worksheet used by the insurer shall
contain, at a minimum, the information in the NAIC worksheet in not
less than 12-point type.  The insurer may request the applicant to
provide additional information to comply with its suitability
standards.  In the premium section of the personal worksheet, the
insurer shall disclose all rate increases and rate increase requests
for any prior policies it has sold in any state.  A copy of the
issuer's personal worksheet shall be filed and approved by the
commissioner.  A new personal worksheet shall be filed and approved
by the commissioner each time a rate is increased in California.  The
new personal worksheet shall disclose the amount of the rate
increase in California and all prior rate increases in California as
well as all prior rate increases and rate increase requests or
filings in any other state.  The new personal worksheet shall be used
by the insurer within 60 days of approval by the commissioner in
place of the previously approved personal worksheet.
   (d) A completed personal worksheet shall be returned to the issuer
prior to the issuer's consideration of the applicant for coverage,
except the personal worksheet need not be returned for sale of
employer group long-term care insurance to employees and their
spouses and dependents.
   (e) The sale or dissemination outside the company or agency by the
issuer or agent of information obtained through the personal
worksheet is prohibited.
   (f) The issuer shall use the suitability standards it has
developed pursuant to this section in determining whether issuing
long-term care insurance coverage to an applicant is appropriate.
   (g) Agents shall use the suitability standards developed by the
insurer in marketing long-term care insurance.
   (h) If the issuer determines that the applicant does not meet its
financial suitability standards, or if the applicant has declined to
provide the information, the issuer may reject the application.
Alternatively, the issuers shall send the applicant a letter similar
to the "Long-Term Care Insurance Suitability Letter" contained in the
Long-Term Care Model Regulations of the National Association of
Insurance Commissioners.  However, if the applicant has declined to
provide financial information, the issuer may use some other method
to verify the applicant's intent.  Either the applicant's returned
letter or a record of the alternative method of verification shall be
made part of the applicant's file.
   (i) The insurer shall report annually to the commissioner the
total number of applications received from residents of this state,
the number of those who declined to provide information on the
personal worksheet, the number of applicants who did not meet the
suitability standards, and the number who chose to conform after
receiving a suitability letter.
   (j) This section shall not apply to life insurance policies that
accelerate benefits for long-term care.
